Sorry Mr McDonnell, But ‘Right to Buy’ Isn’t To Blame For The Housing Crisis
There was once a time where a near majority of homes were controlled by the man in the high castle. The dream of owning a stake within your community reserved for a mere few, while millions of others sentenced to a life void of control and autonomy.
Elected on a wave of dissatisfaction with the relationship between the state and its citizens, Margaret Thatcher placed home ownership at the focal point of her plan to revolutionise the interpretation of government as the servant, and not the master. Her policy, which came to be known as the ‘Right to Buy’, pledged tenants of council housing significantly discounted offers to purchase their home. Indeed, her 1980 policy was not just successful in providing more than 1 million people the opportunity to choose the colour of their front door, but was an irrevocable rolling back of the state that launched the United Kingdom into an era of popular capitalism.
The very essence of liberty is the power an individual wields over their own life. Irrevocable liberty is the only phrase appropriate for this policy, with near 42% of individuals living in properties owned by the council in 1979, whereas today this figure stands at 8%. The subsequent popular support for freedom has been a powerful restriction on those who wish to encroach on such a principle. When famously asked for her most proud achievement, Mrs Thatcher had just two words: New Labour.
‘Right to Buy’ was political anathema for those who wish to continue the domineering intervention of the state into all areas of life. The opposition of such a policy by Michael Foot’s catastrophic 1983 manifesto significantly contributed to the Tory landslide of that general election. The reinterpretation of liberty and drastic narrowing of the interventional goal posts culminated with New Labour not just offering an olive branch to the freedom-loving electorate, but the entire tree. This policy was a success in every regards, and is one that contributed to the past four decades of governments committed to upholding the principles we stand for.
With this reinterpretation of the relationship between governed and governing, those with a vested interest to assume power over society wish to discredit the policy at the centre of their failure. While not calling on his Parliamentary opposition to be lynched, the former Shadow Chancellor and self-described Marxist, John McDonnell is on a crusade against ‘Right to Buy’. Mr McDonnell cites this policy as the root cause for the lack of homes currently being built each year. It is however an empirical fact that the UK is failing to build enough homes in line with demand – however Mr McDonnell’s thesis lacks not only consistency, but economic reasoning.
I wish to propose an alternative thesis for this issue.
The Despotism of The Green Belt
Perceived as the last hope against inevitable urban sprawl, the Green Belt has been immortalised as the defender of British nature and tradition against the tyranny of the creeping metropolis. Having spent the last eighteen years living in the heart of the Cheshire countryside, I have come to passionately appreciate the beauty of our nation, and are committed to protecting this gift for generations to come. This being said however, the Green Belt has long been a significant factor in the unaffordable housing market, and requires serious revision.
As with many inefficient, monolithic government schemes, the Green Belt was conceived amidst the years of the post-War consensus, where utopian thinking that goods can be produced with minimal cost dictated economic thinking. With a population of nearly 20 million less than today and astronomical levels of demand-side stimulation, this period makes for an interesting lesson into the long-term issues caused by state intervention. The Green Belt is the product of where President Truman meets Greta Thunberg - the size of the urban area must be contained at all costs. As President Nixon was later to learn in pulling the United States out of Vietnam, there is a cost involved with everything.
Where the Green Belt fails is the crippling effect it has on developers, and consequently consumers. Around 13% of all land within the United Kingdom is protected as part of the Green Belt, and subjected to highly inflated prices. The effect of this over the years can be found in the masterful research paper by Wiles, in finding that from the purchase of land being worth 25% of a new home’s value in the 1950s, today it is around 70%. The implications of this is a serious disincentive for developers to build new homes on such land. While this may not have been a problem for the smaller population of 70 years ago – with the persistent growth of the United Kingdom since this point – the utopian dream of protecting all our countryside appears outdated.
The solution to this is a modern revision of the Green Belt, in line with the issues facing society today. The problem surrounding this however is how critics powerfully employ Reductio ad absurdum and present the electorate with the false dichotomy: either we protect all the countryside, or all of it will become lost due to home building. The reality, however, is that even small releases of Green Land will significantly tackle the problem. As the Adam Smith Institute has found – it is a misconception to assume that all the Green Belt is a ‘rural idyll of rolling hills’, and points to areas such as a disused petrol station in Tottenham Hale being listed. This acts as a convincing premise behind their recommendation that releasing just 3.7% of the Green Belt could provide over a million new homes.
Bureaucratic Planning Laws
Converse to many nations that consistently outperform our nation in terms of home building, the United Kingdom uses a highly centralised and bureaucratic system in which planners must seek approval to build on a case-by-case basis. The impact of this is a stagnant system where developers must wait for extended periods as bureaucrats crawl their way through the growing backlog.
In countries including France and Japan, zonal planning systems are in use, wherein developers know with complete transparency where they are able to proceed with building upon. This cuts directly through government red tape and inefficiency, and is a direction the United Kingdom must go towards if we wish to address the root cause of the housing shortage
Mr McDonnell’s Inconsistency
Perhaps the greatest error of John McDonnell’s stance on housing is his failure to recognise it entirely contradicts his overall theory.
His regular criticism that not enough homes are being built is a direct attack upon the free-markets that have been utilised as the supplier in past decades. The problem with this thesis is his logic that housing developers fail to build houses fast enough, which subverts his further arguments that capitalists are willing to sell their soul to the devil if it guarantees a quick profit. If, Mr McDonnell, capitalists are so obsessed with their own self gain – why are they willingly sacrificing profit in not producing homes fast enough?
This therefore suggests that the two arguments are incompatible with one another and thus at least one must be incorrect. With current planning laws cultivating a cesspit of red tape and intervention, it becomes clear that the issue does not lie within the free-market, but in the diametric opposite, the government. Only through liberalisation can the housing problem be solved - a sacrosanct task facing the future generation of policymakers.
Bibliography  https://www.theguardian.com/society/2016/jan/04/end-of-council-housing-bill-secure-tenancies-pay-to-stay  https://web.archive.org/web/20150924035254/http://www.insidehousing.co.uk/its-land-stupid/6527988.blog